(1) Field of the Invention
The present invention relates generally to offers (traditionally known as “coupons”) and, more particularly, to a controlled offer redemption system (the “system”) used to validate, verify, and redeem manufacturers' offers, retailers' offers, and cooperative offers (offers made cooperatively by a manufacturer and a retailer), to restrict the redemption of cooperative and retailers' offers to particular retailers, and to authenticate the offer redemption transactions.
(2) Description of the Prior Art
Manufacturers reimburse money to retailers based on the retailers' sales volume of the manufacturers' products. These reimbursements are referred to as “trade dollars.” Theoretically, trade dollars are to be spent by the retailers to promote the manufacturers' products. Such is done by advertising and running specials in the retailers' stores, such as a large display of highly discounted soft drinks in the front of a retailer's store. The display and low price last for a few days and then are removed by the retailer. However, manufacturers have no way of policing the expenditure of trade dollars by retailers. Most retailers do very little, if any, promotion of the manufacturers' products. Instead, most retailers treat trade dollars as a volume discount and put the money in their pocket. Some retailers run promotions just long enough to claim that they were run and put the remaining trade dollars in their pockets.
Retailers' offers and cooperative offers generally have been unaccepted by the industry because the prior art has not developed a system to control their redemption. Common retailer marketing strategies, such as accepting competitor's coupons, has deterred the use of such offers since manufacturers cannot correlate redemption of such offers with specific trade dollar expenditures. Therefore, what is needed is a controlled manufacturers', retailers', and cooperative offer issuance and redemption system that has the ability to verify, validate, and redeem standard manufacturers' offers, retailers' offers, and cooperative offers, and also to restrict the redemption of retailers' and cooperative offers to particular retailers. A discussion of the prior art related to the redemption of manufacturers' offers follows to add perspective to the nature of the present invention.
Manufacturers' offers have become a valuable marketing tool for manufacturers and retailers seeking to increase sales and collect consumer demographic information. Although manufacturers' offers were first introduced decades ago, the process for redeeming manufacturers' offers has remained relatively unchanged.
The traditional manufacturer's offer redemption process typically involves consumer collection of published manufacturers' offers, often found in Sunday newspapers, direct mailings, and other publications. Manufacturers' offers are presented for redemption by the consumer to a retailer at the retailer's cash register when making a purchase. The manufacturers' offers generally are inspected by the retailer's cashier to confirm the expiration date. Sometimes, but not regularly, the cashier may choose to review the purchased products to determine whether or not the consumer actually purchased the products (in the correct sizes, quantities, and/or combinations) required by the manufacturers' offers. The cashier then manually enters the values of the manufacturers' offers in the cash register for subtraction from the total purchase price.
The manufacturers' offers collected by retailers then are manually sorted and returned to the manufacturers for reimbursement. Typically, this is done by a professional clearinghouse. Retailers bundle together redeemed manufacturers' offers and ship them to the clearinghouse. The clearinghouse then sorts the manufacturers' offers by manufacturer and retailer and forwards the manufacturers' offers to the correct manufacturer along with an invoice for payment. The manufacturer generally reviews the manufacturers' offers for evidence of fraud (for example, a large number of evenly cut offers) or other irregularities and then issues checks to the retailers, through the clearinghouse, based on the number of manufacturers' offers that the manufacturer deems valid. If some manufacturers' offers are deemed invalid, the retailers will not be paid for such offers. This is known as a “chargeback.” Such chargebacks then typically are deducted from retailers' future payments to the manufacturer for products delivered to the retailers. This time-consuming process creates additional costs for manufacturers, retailers, and, ultimately and ironically, consumers.
Not only is the traditional prior art manufacturer's offer redemption process costly, it is replete with opportunities to defraud manufacturers on various levels. For example, with the advent of relatively inexpensive and high-quality personal computer equipment, manufacturers' offers may be forged. Additionally, consumers may submit expired manufacturers' offers or manufacturers' offers for products, sizes, quantities, and/or combinations that were not actually purchased. That is, traditional methods of manufacturer's offer redemption do not correlate a specific product sale to each specific redeemed manufacturer's offer at the time of redemption at the retailer. Moreover, it has recently been reported that fraudulent manufacturer's offer redemption schemes may have financed terrorist activities.
In response to the spread of fraudulent redemption of manufacturers' offers, the prior art has seen several systems developed to counter fraud. Some such systems make use of the universal product coupon codes (“UPCs”) and UCC/EAN-128 extended barcodes that already appear on products and some manufacturers' offers. Manufacturers' offers encoded with UPC coupon and UCC-EAN-128 extended barcodes can be scanned by both traditional and customized point-of-sale (“POS”) barcode readers. On a manufacturer's offer, the UPC coupon and UCC/EAN-128 extended barcode data may include the manufacturer's offer expiration date, the offer value, the required product size and quantity, and the like. It is expected that over the next several years, UPC coupon and UCC/EAN-128 extended barcodes will be supplanted by reduced space symbology (“RSS”) barcodes which allow even more data to be stored in the same amount of space.
In some prior art retailer POS systems, the values of the manufacturers' offers are automatically deducted from the total purchase price using a scanning device to scan barcoded manufacturers' offers. Other prior art systems provide that as a manufacturer's offer is scanned, it may be checked against a database file to ensure that it is a valid offer. Some prior art systems even go so far as to compare the manufacturer's offer barcode data to the transaction log of purchased products to confirm that the required product actually was purchased in the correct size and quantity and, if so, destroy or otherwise invalidate the manufacturer's offer. However, unless such a process is completed in a closed, controlled environment, with the ability to independently audit the manufacturer's offer redemption transaction, the possibility of fraud exists.
Therefore, what is needed to eliminate fraud and to permit the proper redemption of manufacturers', retailers', and cooperative offers is a closed system—a controlled offer redemption environment in which manufacturers' offers, retailers' offers, and cooperative offers may be verified, validated, redeemed, and destroyed to prevent re-use, in which the redemption transaction is authenticated to confirm that the offer in fact was redeemed under the controlled conditions imposed by the system, and in which redemption of retailers' offers and cooperative offers is limited only to the retailers that issued the offers or the retailers with whom the manufacturers have cooperatively issued the offers. The present invention satisfies this need.